Is it time for insurers to review their mobile strategies?
In a recently published report by Juergen Weiss based on the Gartner 2013 Global CIO survey, it is predicted that by 2015 at least 40% of the currently existing insurance-related, customer-facing mobile applications will be abandoned due to lack of demand. The reason for this low adoption appears to be the fact that consumers in general rarely interact with their insurer leading to low alignment between customer interest and technical execution.
Nevertheless according to the survey results, developing customer facing mobile applications remains the third most important technology priority for insurers. Weiss points out that there is a definite correlation between the growing download in apps being seen in Europe with wider smartphone adoption. It is very evident that the percentage of users using a cellphone far outweighs those using the internet. In fact it is predicted that by 2017, 79% of users will have adopted smartphones as opposed to just 49% in 2013.
Rhys Collins, Head of African Operations for SSP, agrees with Weiss when he says this raises three key issues for insurers namely: how insurance customers embrace mobile insurance (the demand view); what insurers should expect from mobile applications (the supply view) and finally, what are the best practices for a better mobile insurance experience. There are numerous reasons for the lack of mobile adoption by insurance customers. Collins asserts, as also identified in the Gartner report, that there are very few opportunities for interaction between customers and insurers. Collins says that the potential for interaction exists, for example through monthly renewal information directed by a smartphone app. But to engage customers with these new interaction points insurers need to overcome preferences e.g.
for phoning a contact centre. He also points out that since the primary reason for consumers for selecting an insurance policy is price, if apps don't create or highlight any monetary incentive or benefit for customers there is little appeal. Ignorance is another factor with most customers not even being aware that their insurers provide such an app. The final factor is that many mobile apps appear to be the result of an isolated and rather tactical investment as opposed to a more sophisticated and holistic digital strategy.
Weiss recommends, in view of these factors, that insurers should avoid investing in the design of mobile apps without first having a detailed value analysis. Only then should they develop a holistic app strategy that allows customers to seamlessly use the app, one that is integrated into the entire insurance value chain. Collins says in terms of best practice insurers should stop building mobile apps that simply replicate online portal functions. They need to firstly establish a mobile insurance strategic framework based on different elements of the mobile eco-system (such as technology capability, supply of and demand for such services, regulation, market segmentation etc.) and ascertain to what degree these elements are controlled by insurers, or have a variable or limited influence on insurers.
They can then pick the right mobile architectural style, identify the most commonly used services and expose them.
"Best advice," says Collins, "is don't reinvent the wheel - learn from the best and see what already exists. Then leverage all the capabilities of the smart phone always keeping the end user in mind. It is critical to remember what influencing factors are important like privacy, realtime data, ease of use etc. One has to build apps that provide advice and use gamification techniques to make them more engaging and fun to use. They need to be integrated into your entire value chain as mentioned earlier and, if at all possible, development should involve end customers. Open innovation or crowd sourcing platforms could be useful for this." Collins says that as yet the insurance industry has not identified a 'killer app' that will dramatically increase customer adoption. Telematics or usage-based insurance could be such an app. "Watch this space," he says.
